Diamond Pet Foods to pay owners

A company that made contaminated pet food that killed dozens of dogs nationwide will pay $3.1 million in a settlement with pet owners, an attorney said Friday.

The pet food, which contained aflatoxin, a harmful substance produced by a fungus, was manufactured at Diamond Pet Foods Inc.’s plant in South Carolina. The company will set up a fund to reimburse pet owners for the loss of their dog, veterinary bills and the cost of any unreturned contaminated food, said attorney Jim Andrews, who represented a Knoxville, Tenn., family that sued the company.

Diamond Pet Foods, based in Meta, Mo., acknowledged that workers at its Gaston, S.C., plant failed to follow internal testing procedures to ensure that its products were safe. The company made the acknowledgment after the Food and Drug Administration released a report showing the company had no record of test results for 12 shipments of corn in 2005, when tainted grain slipped into the plant.

The company says it did nothing illegal, according to the settlement.

An attorney for the company said Diamond would cooperate with claimants.

“Diamond’s taken care of its customers since the very first day that they found out about this, and I think the settlement that we’ve entered into continues to do that,” lawyer Jeffrey Thompson said from his office in Knoxville, Tenn.

Aflatoxin is a naturally occurring chemical that comes from a fungus sometimes found on corn and in other crops. It can cause severe liver damage.

The contaminated pet food was sold in 23 states. Diamond recalled about 20 varieties of dog and cat food when a New York veterinarian said in December 2005 that she had linked a dog’s death to the company’s food.